Climate Change – EPA Targets Hydrofluorocarbons Again

The tip of the regulatory iceberg?

The United States Environmental Protection Agency has issued a final rule establishing what it calls “a comprehensive program to cap and phase down the production and consumption of climate-damaging hydrofluorocarbons (HFCs) in the United States.” Hydrofluorocarbons, aka HFCs, are powerful greenhouse gases commonly used in refrigeration and air conditioning equipment, as well as foams and other applications.

A global phasedown of HFCs is expected to avoid up to 0.5 °C of global warming by 2100. This final rule will phase down the U.S. production and consumption of HFCs by 85% during the next 15 years, as mandated by the American Innovation and Manufacturing (AIM) Act that was enacted in December 2020 after the environmental hater “global warming is a Chinese hoax” was evicted by voters the month before from occupying the Whitehouse.

The AIM Act is arguably one of the most significant environmental laws enacted by the U.S. Congress in recent years – co-sponsored and passed with some bipartisan support. (However, none of the politicians quoted in the release were Republicans. Maybe they were too busy arranging for a government shutdown that will be an economic disaster for everyone in the US.?) Backed by a coalition of industry and environmental groups, the law not only phases down HFCs, but it also encourages the use of more climate friendly and energy efficient alternatives that will save consumers money while protecting the environment. American companies are at the forefront of developing HFC alternatives and the technologies that use them, and the AIM Act in theory provides additional opportunities to continue to innovate.

In addition to implementing this phase-down, the Biden-Harris Administration is organizing a “whole-of-government approach” to prevent the illegal trade, production, use or sale of HFCs; support the transition to HFC alternatives through research and purchasing; and encourage the reclamation and recycling of HFCs from retired equipment, thus reducing further HFC production.

EPA estimates that the present value of the cumulative net benefits of this action is more than $272 billion from 2022 through 2050, and that the rule will yield cumulative compliance savings for industry. In 2036 alone, the year the final reduction step is made, this rule is expected to prevent emissions of the equivalent of 171 million metric tons of carbon dioxide (CO2) – equal to the annual greenhouse gas emissions from one out of every seven passenger vehicles registered in the United States. The total emission reductions of the rule from 2022 to 2050 are projected to amount to the equivalent of 4.6 billion metric tons of CO2 – nearly equal to three years of U.S. power sector emissions at 2019 levels.

As extremely potent greenhouse gases, HFCs accelerate climate change, which threatens society with costly health and environmental impacts such as floods, wildfires, drought, and increasingly severe weather events.

EPA said it conducted an environmental justice analysis that determined overall reductions in greenhouse gas emissions from this rule would benefit populations that may be especially vulnerable to damages associated with climate change, such as the very young, elderly, low-income, disabled, and indigenous populations.

Interagency Task Force to Prevent Illegal HFCs

EPA will work with the Department of Homeland Security to prevent the illegal import and trade of HFCs through an interagency task force. The task force will be led by the U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, Homeland Security Investigations and EPA to detect, deter, and disrupt any attempt to illegally import HFCs into the United States. “This coordination builds on and is informed by the agencies’ long experience collaborating to prevent illegal imports, including imports of ozone-depleting substances and vehicles that fail to comply with Clean Air Act standards,” EPA said.

The HFC Allocation final rule establishes the HFC production and consumption baseline levels from which reductions will be made, establishes an initial methodology for allocating HFC allowances for 2022 and 2023, and creates a compliance and enforcement system.

EPA intends to use the approach established through this rulemaking to issue allowances for 2022 by October 1, 2021 and plans to revisit the approach for subsequent years in a later rulemaking. In addition to establishing a general HFC allowance pool and a set aside pool (e.g., for new market entrants), the rule outlines how EPA is issuing allowances for specific applications listed in the AIM Act that the agency was directed to provide allowances for, such as mission-critical military applications.

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